The Treasury Laws Amendment (Enhancing Whistleblower Protections) Act 2019 (Cth) has been passed and has significant implications for corporate Australia. The legislation significantly alters and expands protection for ‘eligible whistleblowers’ who report wrongdoing in the corporate sphere. The amendments revamp the current whistleblowing scheme provided in Part 9.4AAA of the Corporations Act 2001 (Cth).
Emergency and Public Interest Disclosures
The new regime allows whistleblowers who have previously made disclosures to escalate their concerns to parliamentarians and journalists with immunity, after following a prescribed procedure. The discloser must have ‘reasonable grounds’ to believe that the information concerns either ‘a substantial and imminent danger to the health and safety’ of people or the ‘natural environment’, or where it would be in the ‘public interest to do so’.
Certain companies will be required to have a whistleblower policy
In accordance with section 45A(3) of the Corporations Act, a business will be a ‘large proprietary company’ if it satisfies at least two of the following criteria:
What must a whistleblower policy contain?
Each company’s whistleblower policy is required to outline:
Where disclosures are made, companies are also required to ensure that the whistleblower’s identity remains anonymous. Companies that fail to do this face significant penalties as well as potential criminal charges. Exemptions remain for disclosures made to legal practitioners, ASIC, APRA and the AFP.
Deadlines and penalties
The amendments will come into effect from 1 July 2019 and will apply to disclosures made on, or after commencement, but may relate to conduct which occurs or “occurred before, at or after commencement”. However, greater leeway has been given to allow companies to implement a compliant whistleblower policy.
Public companies and proprietary companies that are trustees of a superannuation entity must have a compliant whistleblower policy in place by 1 January 2020. Large proprietary companies have a deadline that is dependent on their financial year.
The amendments have also significantly increased civil and criminal penalties for breaches of the new laws. Companies that fail to implement a compliant whistleblower policy, or fail to do so by the deadline may be subject to a civil penalty. Breaching the confidentiality of a whistleblower, or victimising a whistleblower (or threatening to do so), may also incur a significant civil or criminal penalty.
Key take aways
You need to consider:
Holding Redlich can assist in this regard.
Author: Dan Pearce & Hannah Pelka-Caven
Dan Pearce, Partner
T: +61 3 9321 9840
Darren Pereira, Partner
T: +61 2 8083 0487
Trent Taylor, Partner
T: +61 7 3135 0668
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Published by Dan Pearce, Hannah Pelka-Caven